Quickly Build Something That Earns You 1k Every Month

A few days ago I came across a Hacker News post that asked the following:

Can I build something within that 1 year which starts giving me $1000 profit every month?

An important constraint here was that this was strictly a nights and weekends project because he has a full time job.

The answer of course is YES. There are plenty of examples of people doing just that and more. I’m happy to say that I’m one of the examples of someone that’s built a product in less than a year that brings in over 1k a month in profit.

The Hacker News crowd is full of a bunch of brilliant people that tends to have some great ideas and an interesting perspective on many of the articles posted there. That’s why I was stunned to see how horribly wrong so many of the answers were.

I’ll give some examples of the ones that I had a problem with and where they went wrong.

Example #1: Solve a problem that you are having. If you try to solve a problem that you’re not having yourself, you’ll likely fail.

This simply isn’t true. There are plenty of examples of this not being true — like me. I don’t do freelance web design and I’m currently not experiencing the pain of having to write and manage proposals using MS Word. This had nothing to do with how easy or difficult launching my product was.

What I do have is experience with the problem I’m solving. I used to freelance and I’ve experienced that pain before. Still, I would’ve done just as well launching my product if I didn’t know the first thing about this type of pain and relied on other people to fill in the gaps for me.

If you’re going to rely on someone else’s experience; I recommend you read up on it, observe others during said process, and talk to as many people as you can find about it.

Example #2: Copy a successful app.

This isn’t good enough. Facebook is successful, but copying would take you forever and then get you nowhere. What about something smaller? Basecamp is nice and slim but without the insane following that 37signals has you don’t stand much of a chance of hitting that 1k a month mark.

Hitting 1k a month is hard. Much harder than you would think. Simply copying something that’s making millions isn’t a shortcut to getting there.

If you’re going to copy something, copy the stuff that matters.

Wanna copy Facebook? Go niche with your social network and blow away any competition with a product that’s so well tailored to what those users want that anything else pales in comparison. Forrst comes to mind; it’s a social networking/code & design sharing app for designers.

Copy 37signals by building a big audience first. Take a controversial stand on all sorts of topics you truly find yourself going against the grain on, and build something where every ounce of it reflects your philosophy.

Example #3: Tackle a real problem companies face where the solution is relatively easy to implement.

I like the thinking regarding focusing on businesses but we’re still off the mark here. The problem with this statement isn’t even that the solution is easy to implement (though it’s something to be careful of). The problem is that  you don’t know if you have a market!

Not all solutions will put you in a market where you can earn 1k of monthly recurring profit. There are just way too many factors to consider.

1. How long are the sales cycles in that market?
2. What does the competition look like?
3. Will anyone pay for this solution?

There are plenty more but even taking these three questions into account could drastically change how viable you perceive your idea to be.

So how do you make +1k a month in under a year?

There isn’t a single answer to this question but there a few things that will drastically improve your chances of success.

Some of important things to think about: find a market, gather tons of feedback at every stage, start marketing before you write any code, build an email list, solve a real problem, and build something people like.

That still doesn’t solve the most interesting problem this person has in meeting their 1k goal:

How do you survive the mental and physical abuse you’ll get in a year’s worth of product building as a part time effort?

I won’t lie; It’s freaking hard. But it can be done. And my next post will show you how! Stay tuned…

Ideas Are Worth Plenty

Over the last few years I’ve heard entrepreneurs talk about how ideas are cheap, it’s the execution that matters.  You can even find things like this SAMBA blog post offering proof of how easy and worthless ideas are:

http://www.sixmonthmba.com/2009/02/999ideas.html

I don’t agree.

While there’s some truth there, it’s just not accurate. Ideas do make a difference. Sometimes they’re the difference between success and failure.

Great ideas can inspire action. They can keep you motivated and working your ass off past 2 AM. Try doing that with some lame idea. Good luck.

Now, this isn’t to say that if you have a great idea you’re guaranteed success. It just means you’ve got more fuel to light that entrepreneurial fire within when you need it most.

With the difficulty of launching a successful product, who doesn’t want every advantage they can get?

I Have My Next Product Idea!

Yep, that’s right; I have a new product idea and I love it!

I’ve been looking to buy a super cheap product on Flippa to run some crazy marketing expirements with. Unfortunately, it’s been tough going finding something decent lately.

I was thinking of buying because building a product takes so long.

So why am I building a new product then? Well, because it’ll take all of a weekend to do it. Not just that but I’ll be working with a biz partner on this too.

To be clear, the partnership was formed before the business idea. We quickly started thinking of ideas that we could take on in a relatively short timeframe, and something that we could get excited about.

It’s still pretty early and I’ll talk about the partnership and product details later; I’ll just say that there are going to be a lot of firsts in this project for me

It’s a crazy, wacky, off the wall idea that’s going to fun to implement. Yeah, I’m pretty excited!

Listen to My Interview On EscapingThe9to5.com

Recently I was approached by Maren Kate of escapingthe9to5.com for an interview. I was honored be considered for an interview considering that she’s interviewed people like Craig (from Craigslist), Neil Patel, and Timothy Sykes. Not just that, but she’s doing some really interesting things with her businesses and the blog is experiencing awesome growth.

After trying to talk her out of interviewing me by telling her I was running Bidsketch part time, she talked me into doing the interview by letting me know that her readers would appreciate an interview from someone like me.

I’m glad I listened and went ahead with the interview; she’s easy to talk to which put me at ease (I totally get nervous with stuff like that), and it was an overall fun experience.

Listen to the interview here:

http://www.escapingthe9to5.com/successful-entrepreneurs/starting-an-internet-business-interview-with-ruben-gamez/

Hope you enjoy it!

My LessConf Experience

I just got back from LessConf in Atlanta this Sunday. Wow. That really kicked ass!

There was so much great stuff I can’t possibly list it all. But I met some really cool people over there; I even finally got to meet and hang out with Peldi from Balsamiq who I’m a big fan of.

As far as the accommodations were concerned, the hotel was ridiculously roomy. There was even a bedroom and full kitchen! All for $100 a night.

There were a couple of parties at night though I was only able to make it the first one which was co-sponsored by one of my favorite products of all time: MailChimp.

What about the speakers?

Top-notch. Really inspiring stuff. My two favorite talks:

• Cameron Moll — His talk was focused on design, creativity, and inspiration. Someone mentioned that it felt like a TED talk; I have to agree, except that it was longer (which was great) than most TED talks.
• Peldi from Balsamiq — Now, I’ve read all of Peldi’s blog and have seen a couple of his interviews so I thought it would be similar to Jason Fried and DHH’s Q&A where I could guess what was coming next. I was completely wrong. The talk was funny, inspiring, and got me thinking differently about Bidsketch from a long term strategy perspective.  Absolutely awesome stuff.

All in all, it was a great experience and I’m glad I went out of my way to make it. I’ll definitely be going to the next one wherever it may be.

Pricing Experiment Update

So I just finished sending out a new email campaign in MailChimp to all my existing trial users.

It was a message letting them know that I was making a pricing change to their accounts. What was the change? Both the Basic and Premium plans will be dropping in price.

I had mentioned the pricing experiment towards the end of my last post. While I’m bummed that it didn’t quite work out, I hope some of my users feel good about pricing going down.

It’s almost 2 AM now so I’ll just quickly say that the problem with the increased pricing was that my signup conversions AND my trial to paid conversions both dropped. It made it so that the higher pricing will cost me money if I keep it.

Like I said, I’m a bit disappointed at the results, but it wasn’t a complete loss. I now have some great feedback letting me know what I need to work on to get to the higher pricing.

Five Minutes to a 10x Increase in Conversions

Bidsketch is a SaaS based product I launched just a few months ago. It’s proposal software made specifically for designers.

It’s only been live about six months, but I’ve tried a lot of things to increase conversions. Mostly, they’ve been centered around A/B testing since I was trying to more efficient converting users before I looked at increasing traffic.

Some of the things I’ve tested:

• Taglines
• Signup button text
• Button designs
• Number of plans
• Plan details
• Page headlines (pricing page)

You get the idea.

While I saw some improvement in a couple of areas, the increase in conversions was minimal. And as you can imagine, my revenue didn’t have much of an increase either. Not to say that I’m done with A/B testing, there are several tests I’ve been itching to run, but everything I tried paled in comparison to the one thing that resulted in ten times the number of paid conversions.

So what did I do to get such fantastic results?

I killed my free plan.

Yep, I killed a critical part of my sales strategy. I was freaking out when I did it, but I went ahead and gave it a shot. And with that simple change, I went from a 0.7% conversion rate on paid plans, to a 6.5% conversion rate while having the same exact number of users stick around past the 30 day trial period.

Increase in conversions on paid plans:

When I speak of conversions, know that I’m talking about conversions from my pricing page.

Also, keep in mind that I ask for a credit card upfront;  so there’s more friction to my signup process than most people say you should have.

Free plan? Nope.

Credit card required to try? You bet!

The result? More conversions than you can shake a stick at! Not really, I still have my day job, but a ten times increase in conversions certainly helps.

What About Converting Free Accounts?

When I initially made the change, I was worried that I wouldn’t get any paid signups which would’ve been pretty bad considering that I didn’t have those free account users signing up anymore.

The problem with free users is that they don’t convert to paid plans very well. Sure, I’ve only been live for a few months and the goal with these users is to develop a long term relationship so when they need to pay for an account, they do it with you. Still, in the best case scenarios you’re looking at a 2% upgrade conversion rate with SaaS apps like mine.

That didn’t stop me from trying to convert those free users when they were coming in. I tried all sorts of things but most of it had little impact if any.

A few things I tried to convert those users:

• Added additional upgrade prompts (at the key places when performing certain actions).
• Sent promotional emails offering discounts.
• Gave 15 days to try Premium features for free.

The best I was able to achieve was a 1% conversion rate on upgrades. Not that great considering how much time I spent trying to convert them. Now, compare that to the five minutes it took to kill my free plan.

What This All Means

So, given everything that I’ve learned from this you might expect that I would have regretted launching with a free plan. I can’t say that I do.

There was a nice benefit to having that free plan for the first few weeks: I had plenty of users to give me great feedback on how to improve Bidsketch. Plus, due to my launch strategy, the first week of my launch I had more people sign up for the paid account than the free one.

What I do regret is hanging on to my free plan once conversions to my paid plan started slowing down. Luckily I didn’t let it go for too long before I decided to experiment by removing that plan.

As of this moment, my conversion rate has dropped a bit due to a pricing test I’m running. The good news is that revenue has gone up! I’ll be blogging about that in a few weeks once I feel comfortable that those number aren’t a fluke.

I’m Going to LessConf in Atlanta

Over at the Bidsketch blog I wrote about my upcoming trip to LessConf in Atlanta. I’m really looking forward to it! I’ll be meeting a couple of people I’ve been wanting to meet for a long time.

Realizing that I didn’t have all essentials for my trip, I head out to MOO for some updated business cards. Very impressive service they provide there; check it out if you ever need some cards.

Also, I recently sold my 13″ MacBook so I could buy an iPad. Now I’m left with an iPad and my giant (and heavy) 17″ MacBook Pro which isn’t all that portable.

Which one should I take?

Well, I could bring the iPad and do most of what I need with the iPad. The problem is that I’m typically ultra productive on flights, and I just can’t get real work done on the iPad. I guess I’ll be bringing in the MacBook Pro. Maybe I made a mistake?

Oh, and if you’ll be at the conference (or in the area), I’d love to meet up. Just send me an email: ruben@bidsketch.com

Why Getting Real Isn’t Enough

I’m a big fan of 37signals, and their book Getting Real. I read it online, and still bought the downloadable PDF because I love it so much. I agree with most of what they say, there’s not much I would change about that book.

But they left something out.

Yes, you have to launch quickly. Yes, you should work out your UI before you start coding. And yes, you want to trim your feature list until you’re left with only the stuff that truly matters.

But then…

Add something cool to your product.

Add a small feature that makes it fun to use. Or implement one of the existing features in a fun and unique way. If you want people to use it and give you feedback, this is critical. If you have a barebones todo list manager, who cares? Give people a reason to use it. Give them something to talk about.

It’s fine if you leave out some features people view as critical. Just make sure you’ve got some sort of hook. It makes marketing so much easier. Plus, gets people excited thinking about the possibilities.

Exciting or fun features don’t have to be crazy time consuming. Just adding CKEditor to a textbox might do it. Or maybe exporting to PDF, or GoogleDocs. There are libraries and plugins that make all of this stuff easy nowadays. Take advantage of them.

Pricing Test

I just increased my pricing on Bidsketch.

Previously:
$9/month for Basic and $19/month for Premium.

New Pricing:
$14/month for Basic and $24/month for Premium.

Did I add any major features? Nope.

Sure, I’ve been adding some enhancements every couple of weeks, but nothing groundbreaking. Not just yet anyway. I was considering waiting until after I released a few big features that I’ve been working on. But after talking it over with my good friend Rob, I realized that I never found out what my pricing point was.

I moved up the pricing 3 times, and removed my free plan, but I never tested what the market wanted to pay for Bidsketch. Sure, it’s scary to make any sort of pricing increase. Each time I’ve had this unrealistic fear: “No one is going to sign up, and I’ll get 100 people emailing me about how insane I am to expect people to pay that much!”

Fortunately, that’s never happened. Quite the opposite. Conversions have slightly increased or stayed the same.

It’s been said many times that developers tend to undervalue their work. I completely agree; we do exactly that. That’s why we it’s so important to test your pricing. Even if you lose a little money in the process. And especially if the thought of doing so scares the crap out of you.